Freelancers CO-OP given green light from N.J. to operate insurance plan under Obamacare

President Barack Obama speaks about Affordable Care Act at The Fairmont Hotel on June 6. The New Jersey Division of Banking and Insurance recently approved Healthcare Republic to operate on the exchanges, which will be rolled out in October. Star-Ledger file photo

Freelancers CO-OP of New Jersey has been given the go-ahead to compete for consumers on the new federal health insurance exchange being rolled out this fall.

The insurance plan, called Health Republic Insurance of New Jersey, will be one of several options the uninsured and self-insured can choose from when they begin enrolling on Oct. 1.

The Affordable Care Act, also known as Obamacare, requires almost every American to either purchase insurance or pay a fine.

“HRINJ is anxious to offer quality health insurance to New Jerseyans through a positive and innovative health insurance experience,” said James Martin, executive director and CEO of Health Republic.

Co-ops are health insurance companies that are essentially run by consumers. It’s the same concept as a farm or dairy co-op, only applied to a health insurance company. Health Republic will have a majority of its board of directors made up of its own customers. This, the company claims, allows them to be more nimble and provide better customer service than a large health insurance company.

But it also presents the challenge of creating a new business in a saturated market. Freelancers CO-OP will compete on the exchange with large players such as Horizon, Aetna and AmeriHealth New Jersey. None of the companies have announced their rates, but those are expected to be released in coming weeks.

The Affordable Care Act, seeking to stimulate competition, provided billions of dollars in loans for co-ops like Health Republic, which received $107 million. The loan program has caused consternation among House Republicans wary of these companies’ ability to repay the money.

Darrell Issa (R-Calif.), chairman of the House Oversight and Investigations Committee, has asked if co-ops such as Health Republic will be able to attract enough customers to remain viable, and enough revenue to meet expenses and pay claims.

“New Jersey consumers should absolutely be concerned,” said Ali Ahmad, a House Oversight and Government Reform Committee spokesman. “When co-ops default, taxpayers lose but so do consumers who purchased coverage through the co-op.”

Cynthia Jay, director of marketing and strategic outreach for Health Republic said yesterday the company will be profitable in three years and intends to repay the loan.

“The release of the loans was based on a stringent application process,” she said.

The company plans to enroll 20,000 members in 2014 and 40,000 by 2016, Jay said.

Health Republic has been approved by the New Jersey Division of Banking and Insurance, which requires a detailed feasibility plan, including a marketing strategy and funding source.

The Newark-based company has also partnered with Qualcare, which has a network of 28,000 providers. That will give Health Republic a head start on spreading the word to consumers looking to purchase a health plan.

The company still needs federal approval to be listed as a qualified health plan on the exchange and that application is pending. If that is obtained, Health Republic plans to offer health insurance products on the company website and through a selective network of insurance agents and brokers.
Star-Ledger staff writer Ed Beeson contributed to this report.